Exit and Growth Strategies for Middle Market Businesses

The report below gives a good overview of the third Quarter M&A activity in the Business Services Industry Sector. M&A activity for North American based target companies in the Business Services sector for Q2 2018 included 457 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when CBRE Group Inc acquired FacilitySource LLC from Warburg Pincus LLC for US$290 million in cash. The acquisition strengthens CBRE’s ability to deliver integrated solutions for occupier clients. Founded in 2005, FacilitySource LLC is located in Columbus, Ohio and provides outsource integrated facility support services.

Strong GDP growth (4%+) has translated well into the Business Services sector. On the public markets, the sector performed strong gaining 3.9%, significantly outperforming the S&P 500’s rally of 0.6% in the same period.

Industry Indicators

US corporate profits, an indicator of corporate demand for business services, rose 4.3% in the first quarter of 2018 compared to the same period in 2017.

The value of US nonresidential construction spending, a driver for business services demand, rose 2.7% year-to-date in May 2018 compared to the same period in 2017.

Total US revenue for administration and support and waste management and remediation services rose 4.4% in the first quarter of 2018 compared to the previous year.

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